Market research firm Solarbuzz believes the solar industry will experience rapid growth in 2010, with global PV demand expected to reach 4GW in the second quarter. According to Solarbuzz, the fourth quarter of 2009 saw the PV market reach 2.9GW, 453% times larger than first quarter of 2009, a new record high. The end market strength was driven principally by Germany, Italy and the Czech Republic, while Germany actually accounted for 52% of the global solar demand in the fourth quarter.
“The data demonstrates clearly that managing quarterly corporate performance in 2010 will be even more challenging than it has been over the past two years – a period that proved to be a roller coaster ride for sales revenues and profitability,” said Craig Stevens, President of Solarbuzz, a division of The NPD Group. “In the event that production is not moderated in the second half of the year, the outcome will be a return to more price disruption. However, unlike 2009, there will be significant consequences for high cost producers.”
For the first half of the year, Solarbuzz believes that module prices will remain stable, due to many leading producers already running at high-utilization rates to meet demand. However, preliminary estimates show average solar cell manufacturer gross margins were 8% in the fourth quarter 2009, down from 15% one year earlier. Crystalline silicon module factory-gate prices had fallen 22% between the first and fourth quarter 2009, according to Solarbuzz.
Module production is projected to rise 7% in first quarter and a further 19% in the second quarter 2010, Solarbuzz said. Thin film production will account for 17% of global shipments in first half of 2010.
One key warning was the potential impact on demand once the proposed German feed-in tariff cuts are introduced. The market research firm noted that there should be discipline on production levels and inventory management to limit the potential for more price declines.